Changes to Pa. property taxes advance in House

By Mark Scolforo

Associated Press|

May 13, 2015 | 2:17 AM

The Pennsylvania House has approved an amendment that would place more of a burden for school funding on income and sales taxes. (AP)

HARRISBURG — A plan to replace nearly $5 billion in property taxes that are used to fund public education in Pennsylvania with higher sales and income taxes passed the state House on Tuesday, placing the issue squarely before lawmakers at the start of peak dealmaking season.

The House voted 109-86 for a Republican-drafted plan that would raise the sales tax rate in most of the state from 6 percent to 7 percent and increase the personal income tax rate from 3.07 percent to 3.7 percent.

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Supporters called it a rare opportunity to act on something with wide support in their districts, while opponents warned the plan lacked a mechanism to prevent school boards from eventually returning property taxes to current levels or higher.

"This is not the amendment I would write, but I'm not in the majority," said Rep. Bryan Barbin, D-Cambria. "What I believe is more important is that we reach some compromise that helps our oldest citizens stay in their houses."

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The legislation should contain a "taxpayers beware" warning, said Rep. Daryl Metcalfe, R-Butler.

"Because you're going to be paying more, more in tax dollars," he said. "Your tax burden is going to be greater at the end of the day with this legislation, just as it would be with the Wolf proposal. Either way, the taxpayer gets taken to the cleaners once again."

Majority Leader Dave Reed, R-Indiana, said many people mistakenly believe elimination of property taxes is a simple matter.

"There's an expectation among those in the public that there's an easy fix, that there's a pot of gold at the end of the rainbow," Reed said. "That you can have schools, you can have textbooks, you can have teachers and you don't have to pay for it. That is just not the case."

Gov. Tom Wolf, who has been pushing for property tax relief since taking office earlier this year, said House consideration of the plan was the start of a conversation, not a final product.

"I'm going to wait and see what comes to my desk. There are going to be a lot of, I hope, conversations between the time it's introduced today and the time if and when it gets to my desk. So I'll wait and see what we have there," the Democrat said Tuesday after an unrelated event in Harrisburg.

The vote was on an amendment, and the House still must vote on the underlying bill. If lawmakers there approve it, the measure will go to the Senate for its consideration and would then need Wolf's signature to become law.

Rep. Joe Emrick, R-Northampton, said that in his district, taxpayers would see substantial savings and school districts would collect millions in new revenue.

Property taxes, Emrick said, are "a crushing issue for the constituents that I represent. I know that it's a crushing issue for many, many of my colleagues."

Moving $5 billion from local tax coffers to Harrisburg carries a risk that one day elected officials may be tempted to spend it, said Rep. Eli Evankovich, R-Westmoreland.

"Are you ready to go home and tell your constituents ... that you voted to raise certain taxes for certain of your constituents, at their peril, to give relief to others?" Evankovich said.

Rep. Kate Harper, R-Montgomery, said the proposal "benefits companies and malls and other payers of taxes and puts the burden on individuals and families. Make no mistake about it, it's a massive tax shift."